Mars Products Set For Substantial Brexit Price Hike: President
The latest storm arising from Brexit comes from Mars' president of global food and drinks, Fiona Dawson. She has claimed that the added cost created by post-Brexit trade barriers will almost certainly ensure that its products will see a substantial price hike.
These tariffs, under World Trade Organisation rules, would be in the order of 2o% for meat and other animal products, 15% for all cereals and 10% for fruit and fish.
In her speech to the American Chamber of Commerce, Dawson claimed that these tariffs would have an impact on the supply chain and create a serious threat to jobs.
Rising costs, shrinking economy
With the pound sterling falling in value, British manufacturers have seen knock-on price increases on the cost of raw materials such as sugar and grain. With retail prices generally fixed a year in advance, shops have been unable as yet to pass these costs onto the consumer.
The Financial Times claimed that some companies have resorted to 'shrinkflation', reducing the size of the packages in order to overcome fixed prices.
The UK's Food and Drink Federation published a report last week showing that business confidence continues to fall in the UK, with manufacturers putting this down to the increased cost of raw materials, slimmer margins and a general uncertainty regarding the impact of Brexit.
Mars may have reason to be particularly concerned. Part of the anticipated tariffs is a 30% tax on confectionery, causing a real impact on Mars' ability to trade with its neighbours.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Gavin Ryan. Click subscribe to sign up to ESM: The European Supermarket Magazine.